In Suncor’s world, being on budget is paramount


CARRIE KELLY


While in a perfect world capital projects would come in both on time and on budget, being on budget is the more important of the two, says Suncor Energy’s new president and CEO.


Steve Williams, who took the helm of the oilsands giant this spring after 10 years with the company, is willing to let schedules slide in order to remain profi table.


“It’s not just business as usual here at Suncor,” he says. “You can expect to see some important changes. I’m not focused on getting to one million barrels per day by 2020. That said, I have no doubt we will eventually get to that level of production and beyond.”


Instead, Williams says his focus is on achieving strong returns for Suncor’s shareholders.


“Growth for the sake of growth doesn’t interest me too much. What interests me is profi table growth.”


Suncor needs a rigorous scrutiny on capital discipline, according to Williams, and he plans to do that with the leadership team.


“We plan to spend within our means and we plan to spend effi ciently and eff ectively,” he says.


The second quarter of 2012 was Williams fi rst as CEO.


“It was certainly an eventful three months. We saw crude prices drop by $25 per barrel in the quarter,” he says.


Yet the company produced strong results despite those lower prices, he adds.


For the remainder of 2012, Suncor is working on a steady ramp up of its Firebag project.


Firebag 4 is more than 90 per cent complete and Suncor plans to begin steaming the formation in the fourth quarter. First oil is expected early next year.


For the Voyageur upgrader, Suncor is taking a step back, in conjunction with


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Suncor's in-situ project is located on leases known as "Firebag". The Steam Assisted Gravity Drainage (SAGD) technology uses underground wells to inject steam into the oilsands deposits and collect the bitumen released by the heat. Photo courtesy Suncor Energy Inc.


partner Total, to look at ways to make that project viable.


A review of the economics of that project is necessary since the world has changed so much since it was fi rst approved, Williams says.


The rigorous scrutiny he talks of extends also to the Joslyn and Fort Hills mines.


“Work continues on our other growth initiatives with a relentless focus on cost and quality rather than on schedule. For the oilsands joint venture projects, that has resulted in timelines extending from the original estimates. However we are quite comfortable with taking the necessary time upfront to ensure these projects can deliver that strong value for our shareholders,” Williams explains.


He says big capital programs are not the only means of increasing production.


“I believe we can achieve signifi cant growth simply by running our assets better. I think we’ve only just scratched the surface on this front.”


THE WESTERN CANADIAN PIPELINE | FALL 2012


A substantial amount of maintenance has recently occurred at Suncor’s oilsands plant to position it for reliable production in second half of the year.


Suncor’s second quarter of 2012 by the numbers:


• $1.258 billion — second quarter earnings


• 542,400— barrels of oil equivalent per day average of total upstream production


• 94 per cent— refi nery utilization


• $1.076 billion— total cash operating costs for oilsands operations


• $39 — per barrel cash operating costs for oilsands


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